IOC, BPCL, and HPCL collectively reported a net loss of Rs. 21,201.18 crore for the first half of the previous fiscal year.
Profiting from low crude oil prices and imports of inexpensive Russian crude, private refiners are selling petrol and diesel at prices cheaper than their PSU counterparts.
Following another private sector rival, Reliance Industries, and its partner bp plc of the UK, Nayara Energy, backed by Rosneft, has apparently started selling petrol and diesel for Re 1 cheaper than the state-owned merchants. Nayara Energy has more than 6,000 pumps around the nation.
Jio-bp, a partnership between Reliance and bp, began selling superior grade diesel for Re 1 per litre cheaper than the conventional or standard grade diesel offered by the state-owned businesses.
IOC, BPCL, and HPCL, three state-owned companies, initially established a price freeze on petrol and diesel for 137 days starting in November 2021, when five states had elections.
As the conflict in Ukraine grew more intense, prices were frozen once more starting on April 6, 2022. Since then, the status quo has been maintained even though oil prices were plummeting internationally.
According to reports, the PSUs have not yet fully recovered the losses they sustained when they sold the petroleum below cost last year. IOC, BPCL, and HPCL reported a collective net loss of Rs 21,201.18 crore in the first half of the previous fiscal.
Due to their inability to match the prices of their bigger PSU competitors during this time, the private gasoline merchants lost market share and were forced to close several of their locations.
However, a decline in global oil prices since March has made their retail prices competitive with PSU rivals.
The private sector operators are transferring the benefit to consumers since the price of crude oil has decreased as a result of concerns about global growth and the import of cheap Russian oil.
According to a business spokeswoman quoted in the PTI story, Nayara Energy has implemented a Re 1 discount at its retail locations till the end of June 2023 to further boost domestic demand.
At Vadinar, Gujarat, Nayara Energy is the owner of the second-largest single site refinery in India, with a 20 million tonnes capacity. With a complexity of 11.8, it is among the most cutting-edge refineries in the world.
While Nayara does so for both diesel and petrol, Reliance-BP sells solely diesel at reduced costs.
Tuesday’s price for Brent crude fell from $82.10 at the start of the year to $73.86 a barrel.
